How will they control the number of masternodes if there becomes too many?
Guessing it will be first in first serve but don't know how that could be regulated.
Double MN reward to 40%.
But wouldn't raising reward increase node count?

I wouldn't raise the reward.. I think much more and miners will revolt.
The Maternode system within Darkcoin will be self regulating. It does not need intervention. Spontaneous organization derived from self interest. When the Masternode count gets too high the symptom will be low profit. Consequently some will not run them. Masternode count goes down, profit goes up...etc.